England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON COUNTY COURT
(His Honour Judge Wakefield)

		Royal Courts of Justice Strand London WC2 Monday, 18th March 2002

1. LORD JUSTICE LAWS:I will ask Lord Justice Keene to give the first judgment in this appeal.
2. LORD JUSTICE KEENE:This is an appeal brought by John Anthony Torrance against two decisions made at the Central London County Court by His Honour Judge Wakefield. Those decisions were dated 16th November 2000 and 31st May 2001, the second being in effect a review of the earlier decision.
3. Mr Torrance was, and is, the weekly tenant of a first floor flat in Ealing. The flat is privately owned, the respondents now being the landlords. The appellant is a protected tenant under the 1977 Rent Act, paying a rent of £70 per week. The respondents began the proceedings. They took action against the appellant, seeking possession of the flat on the ground of arrears of rent. He admitted substantial arrears, but claimed a set-off for damages in respect of breaches of the landlords' obligations. However, the claim for possession was struck out for non-compliance with a court order and the respondents were also debarred from defending, in terms of their liability, the Part 20 claim brought by Mr Torrance.
4. The subsequent hearing on 16th November 2000 in the county court was concerned with the quantification of the set-off under the Part 20 claim. That claim was based principally on the respondents' statutory obligations under section 11 of the Landlord and Tenant Act 1985 to keep the premises in repair. There was also a claim for damages which was categorised as being one in respect of breaches of the covenant for quiet enjoyment. At this hearing in November 2000 the judge proceeded on the basis that only the claim for possession by the respondents had been struck out and not their claim for unpaid rent. The judge had before him a number of reports on defects in the premises. There was one dated 1st February 1996, but there were also more recent reports: one by a chartered building surveyor, Mr Reddin, dated September 2000 and two reports by Mr Coultas, an architect and structural engineer, those being dated September 1999 and September 2000.
5. In respect of the breaches of the repairing covenant under section 11 the judge awarded £20 per week as general damages to the appellant, covering his inconvenience and discomfort. That award was made in respect of a period running from 13th December 1993 until judgment, some 360 weeks. Consequently, he quantified the damages on that item at the figure of £7,200. He also awarded damages for interference with the tenant's entitlement to quiet enjoyment. A number of matters such as banging on the door, obstructing access and so on were covered by this, and the judge awarded £1,500 general damages in respect of those breaches. He declined to grant any injunction to prevent interference with quiet enjoyment, taking the view that the breaches were essentially a thing of the past. However, he did make a declaration that the appellant, Mr Torrance, could set off expenses reasonably incurred in carrying out the repairs needed to the property against the rent which had accrued and was to accrue. He made reference to the work set out in the two reports of September 2000, so as to identify the repairs needed. The judge did that because it seemed the most practical way of ensuring that the repairs got done without delay. At the time it must have seemed to him to have been a sensible solution.
6. At a further hearing on 31st May 2001 Judge Wakefield concluded that he had fallen into error at the earlier hearing in his assumption that only the claim for possession had been struck out. He took the view that in fact the proper interpretation of the order earlier made was that the whole claim by the respondents had been struck out, including their claim for rent arrears. Consequently, the judge revised his previous judgment and gave judgment by way of damages for Mr Torrance. He slightly revised the calculation of the period of disrepair, so as to increase the total sum of damages to be awarded to the figure of £8,940 instead of £8,700. Both respondents were jointly and severally liable in respect of £7,600 of that total, with the first respondent alone being liable for the additional £1,340. The judge declined to order specific performance of the landlords' repairing obligations. That is a topic to which I shall have to return.
7. Mr Torrance was dissatisfied with the outcome and therefore he sought permission to appeal. At an oral hearing Lord Justice Mance granted permission to appeal on certain grounds. He took the view that it was arguable that the award of £1,500 for breach of the covenant of quiet enjoyment was too low. He doubted whether there was anything wrong with the award for breach of the repairing covenant but, since he was granting permission to appeal anyway, he stood that part of the application over for the full court to determine. Lord Justice Mance also refused permission to appeal relating to a point concerning the Human Rights Act 1998 and the delay in any injunction being granted.
8. But what particularly concerned Lord Justice Mance was the refusal in the county court of an order of specific performance. It had, by the time of that hearing before Lord Justice Mance, become clear that there was a problem arising from the fact that Mr Torrance was legally aided. That gave rise in the normal way to a first charge in favour of the Legal Services Commission on any damages recovered by Mr Torrance by virtue of the provisions of section 16(6) of the Legal Aid Act 1988. That charge relates to the costs incurred in effect by the Commission. The problem was (and probably still is) that, because of the wording of the order below, as and when Mr Torrance spends any money on the repairs referred to, he incurs a liability to the Legal Services Commission in the same amount; so he could end up by paying for repairs and also having to pay the Legal Services Commission. That problem could well be perpetuated by the fact that the order below referred not merely to accrued rent but also to rent to accrue.
9. It is right that Mr Torrance himself queries whether the Legal Services Commission has any entitlement to a legal charge. The Commission has not been represented before us today and, in their absence, one can only work on a provisional view as to the position. I have to say that the provisional view I have formed is that the Commission may well be entitled to the charge which they assert. In so far as that is disputed, it is not a matter for this court to resolve. But if the position is as I believe provisionally it is, while Mr Torrance could seek to recover the expenditure on repairs from the respondents, that may not easily be achieved. It is therefore unlikely in that situation that he would carry out the repairs; and it is clear from what we have heard today that that situation has worked as a deterrent to the tenant carrying out the repairs himself. This point was raised to some degree at the second hearing in the county court, but the judge appears to have taken the view that it would not be proper for him to revisit his exercise of discretion as to an order for specific performance. I have to say that he did not spell out his reasons for taking that view in any detail.
10. Before us Mr Torrance, who has appeared in person, has raised a number of matters. It is convenient to take them as topics. First of all, there is the topic of the damages for breach of the repairing covenant. The implied covenant by the landlord to keep in repair the structure and the exterior of the dwelling, as well as the installations for utilities specified in section 11, undoubtedly gives rise to a right on the part of the tenant to general damages for inconvenience and discomfort if there is a breach. Section 11(3) provides that, in considering the standard of repairs required, regard shall be had to the age, character and prospective life of the dwellinghouse and to its locality. There was evidence before the judge that there was extensive cracking in the walls of the property and to some extent in the ceilings, and that the gutters, drains, windows and plumbing needed repair. I do not do justice in that short summary to the detailed schedules which were provided, but that summary will suffice for present purposes. The appellant complained that the result of the disrepair was, amongst other forms of discomfort, that the flat was cold, drafty and unpleasant to live in.
11. The appellant's notice contends, on this issue, that the rise in property values in the locality should be used as a measure of damages. Mr Torrance points to figures which he has obtained from the Land Registry showing the well-known increase in the value of dwellings in London, including specific figures relating to terraced houses in the London borough of Ealing. He submits that fairness requires that such an approach should be adopted when damages for breach of the repairing covenant are assessed. In my judgment that would be a quite inappropriate approach. The object of an award of damages for breach of the section 11 covenant is not to punish the landlord but to compensate the tenant. It is to make good the tenant's loss; that is to say, to put him in the position, so far as money can do, in which he would have been had there been no breach: see Calabar Properties v Stitcher [1984] 1 WLR 287. Normally this will be assessed by the difference in value to the tenant during the period in question of the premises as they would have been if the covenant had been observed and as they were in fact. The judge in the county court assessed the tenant's loss, as I have indicated, at a rate of £20 per week. This assessment always requires judgment to be exercised in respect of such evidence of values as is available to the court. For my part, having rejected Mr Torrance's argument about the rise in property values, I can see no basis for interfering with the judge's award in this respect. I would therefore dismiss the application for permission to appeal on this part of the order.
12. I turn to the second issue, which concerns the damages for breach of covenant of quiet enjoyment. The appellant, who is in his mid to late 70s, claimed damages for repeated breaches of this covenant extending (according to the counterclaim, as it then was) over a period from August 1993 to August 1995. In those particulars he instanced 50 occasions between August 1993 and June 1994 when the second respondent came to the premises uninvited. On occasions the second respondent banged repeatedly on the door and on one occasion he shouted for half an hour. I seek to summarise the other detailed complaints that are made under this particular heading. It is said that the appellant was wrongly accused of damaging the premises, of making excessive noise and of trespass. This happened about ten times between November 1993 and March 1994. The respondents also prevented the appellant obtaining access on two occasions in May and June 1994, and they moved or damaged his bicycle on some five occasions in 1995. On one occasion in 1995 his laundry line was removed. Mr Torrance tells us that these matters were merely the tip of the iceberg, although it is right to note that that was how they stood in the counterclaim when it was being dealt with by the judge below. It is said by the appellant that he became alarmed by these instances of harassment. He was awarded, as I have indicated, £1,500 general damages in respect of the breaches of the covenant for quiet enjoyment. It is now argued by him that this was too low. He complains that these activities intruded into his private life and greatly disturbed his peace of mind. It is said that the damages do not give adequate protection for a tenant - particularly an elderly tenant - against such harassment. Consequently, the award should be increased.
13. We have seen witness statements from Mrs Jan, the first respondent, suggesting that the trouble was not quite as one-sided as the appellant would have us believe. However, we have been told that those were not before the judge in the court below and I therefore put them to one side. But even putting them to one side, I for my part cannot see that there was anything wrong with the award of £1,500 in respect of the breaches which I have described. Certainly they would have caused inconvenience and they may well have caused anxiety on the part of the appellant, and these happened on a number of occasions. However, the serious instances appear to me to have been somewhat limited in number, and I can see no basis for interfering with the assessment arrived at by the county court judge. I would therefore dismiss the appeal on that item.
14. One matter which has been raised before us by way of a renewed application for permission to appeal by the appellant concerns the fact that there was a long delay before he was eventually able to obtain an injunction to prevent any sort of harassment of him by the respondents. In the event, Mr Torrance recognised during argument that there really was no basis for any award of damages on this heading, if only because the Human Rights Act had not come into force at the date when these various matters were occurring. I would add, in addition to that, that I can see no basis on which any delay could be visited at the door of the respondents; so it could not for that reason, apart from any other reason, form any basis for an award of damages.
15. I come, then, to what is perhaps the most troublesome part of the present appeal. That concerns the fact that the premises remain in disrepair today and that no order for specific performance was made in the court below. Section 17 of the Landlord and Tenant Act 1985 specifically provides that an order for specific performance is available as a remedy in cases where the landlord is in breach of his section 11 covenant to keep in repair. It is a discretionary remedy and it is only appropriate where damages are not an adequate remedy. It has been held that it is no defence to the making of such an order that a defendant cannot afford to carry out the work: see Francis v Cowcliffe (1976) 33 P & CR 368. Having said that, however, in the exercise of discretion the court will want to have regard to the realities of the situation and try to ensure that a defendant is not put into a position where he or she is likely to end up in contempt of court because of shortage of funds. At the time when the judge below refused to make an order for specific performance the problem to which I have already referred over the charge by the Legal Services Commission was not apparent and the judge therefore thought that it was preferable to refuse that order and instead to allow the tenant himself to carry out the repair work on the basis which I have already described.
16. As I have indicated, I am in no doubt that in the exercise of its discretion a court is entitled to have regard to the practical consequences of granting or refusing an order for specific performance. The appellant in this case is likely to find that the Legal Services Commission has a charge over the damages he recovers for the past breaches of covenant by the landlords. But there is still this continuing disrepair for which the landlords are liable and hence there is a continuing breach of the repairing covenant. The solution originally envisaged by the county court judge to deal with this continuing breach patently will not work, for the reasons I have already set out. In short, the tenant cannot use the rent money to effect the repairs because he is then likely to become liable to the Legal Services Commission.
17. It seems to me that the only way in which the disrepair can be dealt with in the real world is by the landlords doing what they are legally obliged to do and, therefore, by the court requiring them to do it. That to my mind justifies an order for specific performance, so long as the necessary works can be identified with sufficient precision. That is essential because the landlords must know what they have to do and when they have to do it in order to avoid being in contempt of court. But there is also evidence that the landlords in this case may have some difficulty in finding the money to carry out the works when a very large amount of arrears of rent is outstanding. We are told by Mr Torrance that he has accumulated something like £25,000 by way of unpaid rent which he has kept back because of the state of disrepair. There is clearly a log jam which has occurred in this case, with the tenant being unwilling to pay over the accumulated arrears of rent until the repairs are done and the landlords being unable, or at least unwilling, to carry out the repairs unless the arrears of rent are paid.
18. It seems to me that something should be done to seek to break this log jam. I would have been prepared myself to make an order for specific performance against the respondents conditional on payments - probably staged payments - of the arrears of rent by the appellant less the damages which he has been awarded. Had we had sufficiently precise information before this court as to the works needed and their duration, I would have been prepared for this court to make an order for specific performance conditional on staged payments of the arrears of rent and specifying a particular timescale. Unhappily, in my judgment we do not have the necessary detail of the works required, certainly in a convenient form, and we have no information backed up by any expert evidence about the duration of those works. In those circumstances it really is not open to this court to make a legally enforceable order for specific performance. Much as I regret not being able to deal with this matter finally today, it seems to me that we can only remit the matter to the county court on this aspect of the case with an indication, as I have already said, that there ought here to be an order for specific performance made conditional in some way upon staged payments of appropriate amounts of the arrears of rent. That should avoid the problem arising in respect of the charge by the Legal Services Commission. I make it clear that any such staged payments of the arrears of rent should exclude the amount of damages awarded to the appellant, which he is entitled to retain out of the accumulated rent monies.
19. Finally, a point is raised by Mr Torrance about the costs of the proceedings below at an earlier stage when the original claim by the respondents was struck out. No order for those costs was made in favour of Mr Torrance and he now seeks an order from this court reversing that. I have to say that I can see no basis for interfering with the judge's order. Costs orders are always ones with which this court is reluctant to interfere. But looking at the reasoning given by the judge below, it seems to me that he was justified in taking the approach which he did. I therefore would not interfere with the order he made on that point.
20. It follows that in a number of respects I would dismiss this appeal by Mr Torrance, certainly in respect of the appeal and the application as to damages; but I would allow the appeal in respect of the refusal to order specific performance and remit the matter to the county court judge to determine the details which will be included in such an order.
21. LORD JUSTICE LAWS: I agree that the application for permission to appeal stood over by Lord Justice Mance should be dismissed, as should the appeal upon the question of damages for quiet enjoyment. For the reasons given by my Lord I agree also that there is nothing in the proposed appeal in relation to the costs below or in the point sought to be taken under the Human Rights Act. Further, I agree with the making of the orders proposed by my Lord in relation to the outstanding repairs. The matter will therefore go back to the county court, as my Lord has indicated.
Order: as set out in judgment; matter remitted to county court for further hearing; transcript of judgment to be expedited and provided expeditiously to the county court and to the parties at public expense; no order as to the costs of today; view expressed that it would be highly desirable that hearing in county court should come on as quickly as possible.